Common Contractor Disputes Covered by the Recovery Fund

The Florida Homeowners’ Construction Recovery Fund (“Recovery Fund”) is established pursuant to ss. 489.140–489.144, F.S., and provides a final chance at recovery for Florida Homeowners incurring losses from the misconduct by Florida licensed Division 1 or 2 contractors.  The Recovery Fund is administered by the Florida Construction Industry Licensing Board (CILB) under the Department of Business and Professional Regulation (DBPR).  

The Recovery Fund is a last resort for Florida Homeowners to seek relief from contracting misconduct.  Claimants must have exhausted all legal alternatives before seeking relief from the fund. 

The Recovery Fund will only provide compensation to homeowners who have exhausted all alternative remedies and obtain one of the following, directly related to the contractor’s violation:

• Final judgment from a court of competent jurisdiction
• Arbitration award
• CILB Restitution Order

The Recovery Fund only covers specific types of claims against these specific types of contractors:

• Claims based on mismanagement, misconduct like failing to pay subcontractors 
• Abandonment claims but only after 90 consecutive days
• False misrepresentations about bonding, insurance, or payments

Examples of Common Contractor Disputes Covered by the Recovery Fund

What do these situations look like?  Here are some real-life hypotheticals to help you understand if your claim is eligible for relief from the Recovery Fund.

A. Financial Mismanagement or Misconduct

These types of claims arise when a Florida licensed contractor:

• Misappropriates funds paid by the homeowner
• Fails to pay subcontractors or suppliers 
• Engages in deceptive billing practices.

This type of dispute is one of the most common and often involves contractors who divert funds for personal use or fail to manage project finances responsibly.

Example Scenario: Lisa bought her dreamhouse in Orlando.  She thought that the house was a real gem, but it needed a little polish.  She hired a licensed contractor to renovate her kitchen for $45,000. The contract called for $30,000 upfront, part of which would be used for materials.  Lisa was pleased as work started immediately.  The project was delivered on time, but after it was finished the contractor suddenly vanished.  He stopped responding to calls and emails.  As the weeks went by, Lisa received lien notices from suppliers who had not been paid.  She realized the notices were for costs she had already covered.  Lisa filed a lawsuit against the contractor and obtained a civil judgment confirming the contractor’s financial misconduct.  Lisa discovered that a civil judgment is sometimes just a piece of paper as she discovered her contractor had no assets to recover.  It was time for her to file a claim to the Recovery Fund.

B. Abandonment of Construction Project

Sometimes hazards are not simply financially related.  Abandonment occurs when a contractor leaves the job site without a legal excuse or proper notice for more than 90 days.  An unfinished construction site is a hazard in the very home of the homeowner.  The homeowner is left with unsafe conditions in their home and must fine another contractor to finish the job

Example Scenario: Maria, a homeowner in Tallahassee, contracted a Florida licensed pool contractor to install a custom pool and patio for $60,000. The contractor broke ground and completed the excavation for the pool but disappeared shortly afterwards. For 90 days, Maria frantically tried to contact the contractor with no response. She discovered that the contractor had left the state and abandoned a string of other projects.  Maria filed a complaint with the Construction Industry Licensing Board and received a restitution order. Unfortunately, Maria could not locate any assets to recover from the contractor.  Maria was able to file a claim with the Recovery Fund.

C. Fraudulent Acts or False Statements

Types of contractor fraud
Misrepresenting their license statusLying about their qualifications	Lying about the scope of work to be performedProviding falsified documentation

Fraud cases often involve homeowners being misled about the contractor’s credentials, resulting in substandard or illegal work.  It can create problems in addition to just uncompleted work.

Example Scenario: Joseph hired a licensed Florida contractor to build a detached garage for his new home gym. The contractor assured Joseph that all necessary permits had been obtained and showed him what appeared to be official documents.  The contractor never applied for permits and provided digitally altered copies of permits from unrelated projects to Joseph for review.  Joseph did not discover the fraud until he was hit with a stop-work order for unpermitted construction. The contractor feigned ignorance and refused to correct the issue or refund any payments. Joseph filed a complaint with DBPR.  He appeared at his hearing before the Construction Industry Licensing Board and obtained a final judgment for fraud against the contractor. Joseph could not enforce judgment, so he submitted a claim to the Recovery Fund.

Protecting Yourself from Contractor Misconduct in Florida

Hiring a licensed Florida contractor is a good way to protect yourself and your home.  By employing a licensed Florida contractor, you ensure that you will get a level of competency in the completion of the project.  However, if the contractor lies, fails, or walks away the Florida Construction Recovery Fund is there to help Florida’s Homeowners.  Jimerson Birr can help you file a lawsuit against the contractor or simply file a claim with the Recovery Fund.  Contact us before it is too late.